Hybrid Electric Vehicles: Consumer Misperceptions - Arif Syed

12 Pages·2002·0.13 MB·English

Hybrid Electric Vehicles: Consumer Misperceptions

Arif Syed

Abstract Many efforts have been made to reduce emissions into the atmosphere in the past 25
years, however the number of cars on the road and the average number of miles driven has been
steadily increasing. Vehicle exhaust accounts for almost half of the ozone forming emissions
produced in California. A mass switch-over to HEVs would reduce emissions into the
atmosphere and reduce US dependence on foreign oil. Hybrid electric technology is expensive,
and despite government subsidies and tax breaks, the cost of HEVs to consumers remains $3000
- $10000 higher than comparable vehicles. Many public outreach programs have been created to
overcome public misconceptions in order to undermine the high cost of HEVs. This study
showed that the public still has many misconceptions regarding HEVs, primarily regarding how
HEVs compare to gas powered vehicles and how HEVs are maintained. Information pertaining
to public awareness was gathered at Honda and Toyota (the two manufacturers that offer HEVs)
dealerships via questionnaire survey. The data showed that about a fifth of the participants had
never even heard of HEVs. Most of the participants who knew of HEVs, however, indicated that
HEVs are worse than conventional vehicles with respects to performance and maintenance and
thought that HEVs need to be plugged in overnight for recharging. Overcoming misconceptions
such as these could help increase sales of HEVs. Public outreach programs have been
successful, but a mass advertising and education campaign could prove to be even more
beneficial.
Introduction
Air quality in California has improved dramatically over the past 25 years, largely due to
continued progress in controlling pollution from vehicles. Despite this progress, the number of
vehicles driven continues to grow and people are driving an increasing number of miles (Wouk,
1995). Well over half of the ozone-forming emissions produced in California come from the tail
pipes of vehicles (Hushcroft, 1993). Vehicle use accounts for 44 percent of the nation’s average
oil consumption of 19.8 million barrels per day. A 50 percent increase in the average miles per
gallon of cars and SUVs would lead to a 5 percent decrease (one million barrels less per day) on
oil imports (Reuyl, 1996). The Partnership for a New Generation of Vehicles was created as a
government and industry effort aimed at making more fuel efficient automobiles (Reuyl, 1996).
They first focused on creating a zero emissions electric vehicle, but couldn’t develop batteries
that would last for more than 80 miles of travel before needing recharging (Shimizu, 1993).
Hybrid electric technology proved to be a more practical alternative to gas engines in terms of
capabilities and fuel efficiency compared to electric vehicles. Hybrid electric technology
increases gas mileage and reduces emissions using an electric motor that works in conjunction
with the internal combustion engine. Hybrid electric vehicles (HEVs) feature cutting-edge
technology that is costly to manufacture, so even after government subsidies and tax credit for
buyers they are not competitively priced. The high cost, along with misconceptions of HEVs
due to exposure to old outdated technologies and misleading stories in the media (Urban, 1997)
offer obstacles for HEV market success. The high production and consumer costs for HEVs will
decrease as the demand for the new technology increases, as is the case with most technologies
introduced to the market (Wienberger, 1991). The high costs are a fixed obstacle for the time
being, but something can be done to increase public awareness and invalidate misconceptions.
Effective marketing strategies are essential in order to increase the demand for HEVs. Although
many efforts have been made by state agencies such as the Air Resources Board and the
Department of General Services to increase awareness about HEVs (Urban, 1997), this study
attempts to show that the public still has many misconceptions which in turn hinder market
success.
HEVs aren’t necessarily identical in their operation. But in simplistic terms, their systems
are similar. An internal combustion engine provides the basic propulsion for the hybrid vehicles
but is aided by an onboard electric motor. How and when the electric motor assists can differ,
however (Wouk, 1995). For example, in the three different models of HEVs available to the
public currently, the electric motor provides torque for the front wheels right at the start of
acceleration from a standstill. As the car picks up speed, the internal combustion engine kicks
in, and at top highway speeds the gas engine alone provides the power (www.energy.gov). In
another type of HEV an internal combustion engine is the sole power source for the rear wheels,
while an electric motor provides added power to the front wheels when needed. To date, only
three HEV models are currently available in the US – the Toyota Prius, the Honda Insight, and
most recently a hybrid version of the popular Honda Civic. These models are comparable to
conventional vehicles (CVs) in terms of performance and handling (www.energy.gov). They
have better initial acceleration due to the torque from the electric motor which doesn’t rely on a
certain rpm level to be reached before high torque is achieved as with gas engines (Wouk, 1995).
Tests comparing the performance of HEVs to CVs showed that HEVs are comparable to popular
vehicles such as the Toyota Corolla and Honda Accord in terms of acceleration. These models
are comparable to conventional vehicles (CVs) in terms of performance and handling
(www.energy.gov). HEVs produce some emissions unlike electric vehicles, but t(cid:31)hey are
greatly reduced in comparison to conventional vehicles. HEVs are certified better than the
SULEV (super ultra low emissions vehicle) level – they are certified at the ‘green’ level (Wouk,
1995). The hybrids available today cut emissions of global warming pollutants by a third to a
half, and later models may cut emissions by even more (www.energy.gov). In addition, the
Toyota Prius, Honda Insight, and Honda Civic can turn off their engines when the vehicles are at
rest – for example, when they’re waiting at a stoplight. This not only saves on fuel but cuts
emissions. Also, HEVs never need to be manually recharged; the batteries are continuously
recharged while the vehicle is being driven (Wouk, 1995).
Much market research has been conducted in order to study vehicle purchasing factors and
patterns of consumers. Most published advertising studies range from content analysis and
qualitative investigations of consumer perceptions to statistically sophisticated econometric
modeling (Shimitzu, 1993). Virtually all of this research tends to fall into two broad categories:
a) assessments of the influence of various types of advertising appeals or messages on consumer
attitudes and b) studies of specific market segments. As an example of the first category, a
study by Urban (1997) tested automobile advertisements using statistics against advertising
without statistics. He concluded that consumers considered the advertisements containing
statistics to be more effective. In the second category of studies, researchers have focused on
differences between types of consumers as defined by various segmentation variables. HEVs
feature cutting edge technology – for some customers, this is a positive benefit. The
manufacturer marketing strategies used in early demonstration programs focused on “early
adopters” and “techno champs” for that reason (Thione, 1993). For other customers, however,
the introduction of new technology is cause for hesitation. Such customers will need additional
information and consultation. They will also be very sensitive to any perception that the HEV
market has no future (Sukhdail, 1995). A survey study conducted by the Office of
Transportation Technologies (OTT), a branch of the Department of Energy, showed that the
customer’s willingness to pay a premium for fuel economy and emissions improvements is
limited. By combining the results of several surveys, they further found that fuel economy has
not been an important consideration since the mid-1980s (www.energy.gov). The Electric Power
Research Institute (EPRI) conducted a study on people’s propensity to purchase HEVs before
and after obtaining a better understanding of the various options and the attributes HEVs could
offer. Their results showed that the focus group in their study were more interested in
purchasing an HEV once they were made aware of the advantages (Reuyl, 1996). These studies
show that information about the impacts of driving on the environment and awareness of the
benefits of HEVs are key to the market success of HEVs.
In order to develop a sustainable market for HEVs, sales need to be increased by advancing
awareness about the new technology and the benefits it offers. Many people are unaware of the
capabilities of the new production HEVs on the road today. Most people have misconceptions
about HEVs. These misconceptions are partly due to exposure to old outdated technologies or
misleading stories in the media (Urban, 1997). The perception of electric vehicles being slow,
unable to travel long distances, and in constant need of recharging has been extended to HEVs
(Thione, 1993), and this association needs to be dispelled. HEV stakeholders have taken
significant steps to get the word out about HEVs. To date, the Air Resources Board (ARB) and
Department of General Services have been very proactive in conducting public outreach to
schools, community events, and community groups. The Sacramento Municipal Utility District
(SMUD) has produced excellent outreach materials providing information on HEVs. SMUD
also showcases HEVs at local schools and community events in order to increase awareness.
The US Department of Energy has formed a group called the Green Vehicle Marketing Alliance
to address and promote green vehicle marketing. This group is made up of representatives of the
auto industry, federal, state and local government agencies, environmental and consumer
organizations. These stakeholders come together to form an improved mutual understanding of
the challenges of and opportunities for marketing environmentally friendly vehicles (Fukuyama,
1992). These efforts have advanced awareness of HEVs, but many people remain in the dark
about the advantages and benefits of HEVs. This study will attempt to a) show that public
knowledge regarding HEVs is low despite the public awareness advancing efforts and b)
emphasize the importance of a mass advertising campaign to advance sales of HEVs.

Methods
HEVs offer important benefits over CVs – reduced emissions and increased fuel efficiency
while maintaining the performance and capabilities of gas powered cars. Their high cost is a
fixed barrier for market success until demand for HEVs increases. The publics’ misconceptions
also serve as a barrier; however, misconceptions can feasibly be overcome in a short period of
time. A survey was designed for this study to ascertain the publics’ perceptions on HEVs. The
survey gathered information regarding if and where the participants heard about HEVs; what
style of car interests them the most; what factors are most important to their car buying decision;
and how much more, if any, they are willing to pay for an HEV. It asked participants to compare
HEVs to conventional vehicles in terms of performance, maintenance, environmental impacts,
and purchase price. It also tested the participants’ knowledge of how HEVs are maintained, how
they work, and where they are available. At the end of the survey, participants were asked for a
rough estimate of their household income and age.
The survey was administered by the author outside of two different car dealerships from
March 24 to April 6 during peak hours (11 am – 4 pm as suggested by the managers at the
dealerships). The survey was handed out to people passing by and entering the dealerships
located in Berkeley: Doten Honda and Toyota of Berkeley, both found on Shattuck Avenue in
Berkeley. A sample size of 100 was chosen due to time constraints - 98 surveys were
completed.
The data was first divided into two categories: those who had heard of HEVs and those who
had not. The surveys completed by those who had never heard of HEVs were of no more use
other than to show how many participants are completely clueless about HEVs. The remainder
and majority of the surveys were analyzed statistically using the chi-squared test. Age and
income were treated as the independent variables and the misconceptions and interests were
treated as dependant variables. The chi test was used to determine associations between age and
income and each of the common misconceptions (questions 8-15). Also, the chi test was used to
determine associations between age and income and the participants who have considered HEVs
as a possibility for their next vehicle purchase (question 4). Percentages were calculated for:
where most participants got their information regarding HEVs (question 2); the type of vehicle
most participants want to purchase (question 3); the most important car purchasing factors
(question 5); how many participants chose lower initial purchase price over increased savings on
fuel and maintenance over time (question 6); the number of participants who would pay more,
and how much more, for HEVs (question 7); and the most common misconceptions (questions 8-
15).

Results
Of the 98 participants, 20% had never heard of HEVs. The statistical tests were conducted
on the 80% who had heard of HEVs.
A chi-squared test revealed an association with a p-value of .07 between participant age and
whether the participant had ever considered purchasing an HEV. Figure 1 shows that little over
half (56%) of the participants aged 20-50 had considered it and about 80% of the participants
aged 50 and up had never considered purchasing an HEV.
Figure 1: Considered Purchasing HEV
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20-35 35-50 50-65 65+
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An association between participant age and their perception of HEVs versus conventional
vehicles with regards to maintenance was shown using a chi-squared test resulting in a p-value of
.02. Figure 2 shows that about half of the participants aged 20-35 indicated that maintenance
costs for HEVs are the same as those for conventional vehicles. Participants aged 35-50 were
split fairly evenly among ‘better’, ‘worse’, or ‘same’ responses for maintenance costs. 77% of
the participants aged 50 and up indicated that maintenance costs are worse for HEVs.
Figure 2: Maintenance - HEV vs CV
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20-35 35-50 50-65 65+
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An association between age and participant perception of how HEVs are powered was also
found using a chi-squared test. Figure 3 shows 82% of the participants aged 20-50 and 50%
aged 50 and up correctly indicated that HEVs are powered by an internal combustion engine
with a p-value of .05.
Figure 3: How Are HEVs Powered?
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Figure 4 shows 57% indicated that HEVs need to be plugged in overnight for recharging and
34% indicated that nothing extra (compared to CVs) needs to be done to recharge the batteries
for the electric motor.

Figure 4: How Are The Batteries Charged?

Num2b0e r of Participants
15

Special Station
10 Plugged Overnight

Do Nothing
5

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20-35 35-50 50-65 65+
Age

Most of the participants knew where HEVs are available (83%) and that they cost more
compared to CVs (73%).
Most of the participants had gotten their information about HEVs (participants were asked to
indicate all sources they used) from magazines (64%) and the internet (57%). When asked to
indicate which type of car they’re interested in (they were asked to check all that apply), 25%
checked SUVs, trucks, minivans, and sports cars; 51% chose sedans.
The majority of participants (60%) preferred a lower initial purchase price to increased
savings on fuel and maintenance over time. About 60% also indicated that HEVs perform (in
terms of acceleration, handling, braking distance) worse than CVs.
All participants (with the exception of three) indicated that HEVs have better fuel efficiency
and are better for the environment compared to conventional vehicles. Most of the participants
ranked either reliability or performance as their most important consideration when deciding
upon a vehicle.
The different misconceptions showed no association with income.

Discussion
The results show that the majority of participants had misconceptions regarding HEVs. What
most of the participants knew was where HEVs are available and that they cost more compared
to CVs. They also indicated correctly that HEVs have better fuel efficiency and less
environmental impacts. Apart from that, most of the participants had misconceptions about the
maintenance and performance of HEVs. These are very important misconceptions because they
are major factors that consumers consider when purchasing a vehicle (Thione, 1993).
The majority of the participants indicated that they would be willing to pay $1000 - $5000
more for an HEV version of a car that could meet all their requirements. This shows that people
are interested in the environmental impacts of driving. The limited variability in models of
HEVs is an obstacle for their market success; however, most of the participants indicated that
they are interested in purchasing sedans, which is currently the only style of vehicle using hybrid
electric technology. Also, for consumers who are discouraged by the HEV’s unique or awkward
appearance, the new hybrids will look no different from the styles of CVs they are accustomed to
– for example, the new hybrid Honda Civic is simply a hybrid version of a popular vehicle. A
very common misconception was that HEVs need to be plugged in overnight for recharging.
The majority of the participants also indicated that they don’t think HEVs perform as well as
CVs, and performance was chosen as the highest ranking factor influencing their car buying
decision. Overcoming these misconceptions regarding the maintenance and performance of
HEVs could lead to an increase in sales. Accurate information aimed at the public about the
benefits and conveniences of HEVs is vital for their market success (Barber, 1993).
The survey for this study unfortunately did not contain very structured questions. The
questions dealt only with basic interests and did not span a very wide range of misconceptions.
Questions aimed at how the price and accessories of a vehicle influence people with varying
incomes is just an example of how the survey could have been modified to produce more specific
data which could then have shown some associations between income and the publics’
perceptions or interests. The public has many different perceptions of HEVs, and although the
survey didn’t show many associations between age and misperceptions, shortening the age gap in
each of the age groups (i.e. grouping participants into ages 20-25, 25-30, etc. instead of 20-35,
35-50) could reveal more associations. The sample size for this study was small. A larger
sample size could reveal more trends. The results of this study showed that the public probably
still has some misconceptions about HEVs. Many agencies and organizations have tried to
promote awareness of HEVs, but the information they provide it seems is not reached by
everyone.
One way to overcome these lingering misconceptions would be to create and advertise for a
web site that contains all the information the public could want regarding HEVs. The internet is
used by people everywhere, and most of the HEV sites on the web currently provide varying
information about HEVs. It might be confusing to consumers, for example, to see different
values for how many miles per gallon HEVs travel from different sources. Creating a site with
information from well known and respected sources for the public would be an easy way to
overcome some misconceptions. Also, the information on the web site could be placed onto CD-
ROMs and distributed at dealerships, community events, and schools. I feel this would be a very
cost effective and efficient method of dealing with misconceptions.
Future studies could focus in on the politics behind the advancement of HEVs. In January of
2002, President Bush announced that he will no longer provide financial support to help the
Partnership for a New Generation of Vehicles advance HEV technology. Instead he chose to
support fuel cells which would be zero emissions vehicles, but they aren’t expected to be widely
available to the public for another decade or so (ENN, 1/10/02). Also in March of 2002, the
Senate rejected a proposal to increase the average miles per gallon by 50% (ENN, 3/14/02).
Consumer misperceptions and the high cost of HEVs can be overcome with time and effort, but